county finance & economic planning
TRANSCRIPT
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ISIOLO COUNTY GOVERNMENT
COUNTY FINANCE & ECONOMIC PLANNING
2018 COUNTY FISCAL STRATEGY PAPER
“SUSTAINABLE SOCIAL ECONOMIC GROWTH AND DEVELOPMENT”
2018
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FOREWORD The 2018 County Fiscal Strategy Paper (CFSP) sets out the County's priority programs to be
implemented under the Medium Term Expenditure Framework (MTEF). This CFSP comes at
brink of commencement of the implementation of the second County Integrated Development
Plan 2018-2022 and Third Medium Term Plan (MTP III) (2018-2022).
The 2017 CFSP was prepared based on Promotion of Sustainable Social Economic Growth
and Development. Its implementation is currently ongoing and it is expected to increase
speed, protract broad-based economic growth and to change our county’s economy in line
with the county transformative agenda and the vision 2030.
Significant progress has been made in the implementation of 2017/2018 budget so far;
however some challenges have been encountered especially on the release of funds from
national government and delayed movement to e-Procurement platform.
Similarly the local revenue collected has been recording a shortfall which has continued to
impact negatively on our budget implementation. The local revenue collection stood at
Ksh.54 Million in the first half of FY 2017/18.
CFSP, 2018 will emphasize on sustainable social economic growth and development. We
will also continue building on the achievements so far made in most sectors and with the
policies set out in the CFSP, 2017.
In pursuit of the 2018/19 budget theme, the County Government has identified key
development priority areas from the County Integrated Development Plan(CIDP) and Annual
Development Plan(ADP) that include: Enhancing food security, sustainability of livestock
based livelihoods and commercializing of livestock; investment in Infrastructure
development and expansion; investing in quality, affordable and accessible Health Services;
Enhancing governance, transparency and accountability in service delivery through public
participation; investing in Education, focusing on construction of more ECD structures,
equipping of youth polytechnics and technical institutions as well as social development of
the communities through social programs; Promotion of trade and industrial development for
a rapidly industrializing economy and Investment in conflict resolutions by promoting
initiatives for peaceful and cohesive society.
We will continue scaling down expenditures on non-priority areas and revise our local
revenue projections to reflect the reality on the ground while enhancing our revenue
collections.
The paper covers the following broad areas in review of the fiscal performance of financial
year 2017/2018; highlights of the recent economic developments and the economic outlook;
broad strategic priorities and policies for the Medium Term and the Medium Term Fiscal
Framework. The fiscal framework presented in the paper ensures a sustainable financing
while allowing continued spending on priority programmes. Achievement of the set
objectives calls for greater transparency, effectiveness and efficiency in public financial
management in order to ensure fiscal discipline
Mr Mwenda Thiribi
CECM- Finance and Economic Planning
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ACKNOWLEDGEMENT
The County Fiscal Strategy Paper (CFSP) is envisaged to play critical role in influencing the
pace at which the County’s economy will grow. It provides a framework under which the
County will deal with the key strategic priority issues and challenges in the next three years
and beyond. It also outlines a summary of government spending plans as a basis for the
2018/19 budget.
The County would like to thank all the individuals who played various roles during the
preparation of this County Fiscal Strategy Paper, CFSP. We are grateful for their inputs.
We especially acknowledge the dedication of core team of technical staff from the
Department of Finance and Economic Planning.
This core team undertook the preparation task with the support and guidance of H.E The
Governor, Deputy Governor, CECs and Chief Officers. The draft 2018 CFSP document was
presented to the various institutions and members of the public for their inputs and direction.
Equally, my special thanks go to all who are not individually mentioned but took part in this
exercise; you remain an asset to this county.
Mr. Yusuf Mohamed
Chief Officer - Finance and Economic Planning
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ABBREVIATIONS AND ACRONYMS
A.I.A Appropriation in Aid
AIDS Acquired Immunodeficiency Syndrome
CFSP County Fiscal Strategy Paper
CIDP County Integrated Development Plan
CRA Commission on Revenue Allocation
DANIDA Danish International Development Agency
ECD Early Childhood Development
FY Financial Year
GDP Gross Domestic Product
HIV Human Immunodeficiency Virus
ICT Information Communication Technology
IFMIS Integrated Financial Management Information System
Ksh Kenyan Shilling
LAPSSET Lamu Port and South Sudan-Ethiopia Transport
MTEF Medium Term Expenditure Framework
MTP Medium Term Plan
PAYE Pay As You Earn
PFM Public Finance Management
PPP Public Private Partnership
SBP Single Business Permit
VAT Value Added Tax
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TABLE OF CONTENTS
FOREWORD .................................................................................................................................. i
ACKNOWLEDGEMENT .................................................................................................................. ii
ABBREVIATIONS AND ACRONYMS ............................................................................................... iii
TABLE OF CONTENTS ................................................................................................................... iv
LIST OF TABLES ........................................................................................................................... vi
LEGAL BASIS FOR COUNTY FISCAL STRATEGY PAPER ................................................................... vii
COUNTY GOVERNMENT FISCAL RESPONSIBILITY PRINCIPLES ...................................................... viii
1: INTRODUCTION ........................................................................................................................ 1
1.1 OVERVIEW ................................................................................................................................. 1
1.2 Outline of the County Fiscal Strategy Paper. ................................................................................ 2
2: RECENT ECONOMIC AND FISCAL DEVELOPMENT ....................................................................... 3
2.1 Economic and Fiscal Overview .................................................................................................... 3
2.1.1Global and regional Overview ................................................................................................ 3
2.1.2 National Economic Overview ................................................................................................ 3
2.1.3 National Fiscal Overview ....................................................................................................... 5
2.2 County Economic and Fiscal Overview ........................................................................................ 5
2.2.1 County Economic Overview .................................................................................................. 5
2.2.2 County Fiscal Overview......................................................................................................... 6
3. FORWARD ECONOMIC AND FISCAL DEVELOPMENTS ............................................................... 12
3.1 National Forward Economic and Fiscal Development ............................................................... 12
3.2 County Forward Economic and Fiscal Development ................................................................. 12
3.2.1 County Forward Economic Development ............................................................................ 12
4: STRATEGIC PRIORITIES AND INTERVENTIONS .......................................................................... 14
4.1 Overview ..................................................................................................................................... 15
4.2 Livestock and Crop Productivity ................................................................................................ 15
4.3 Developing both Surface and Underground Water Sources ....................................................... 16
4.4 Access to Quality and Affordable Health Services ..................................................................... 16
4.5 lands, physical planning Road, Infrastructure, Public Works Housing and Urban Development
.......................................................................................................................................................... 17
4.6 Early Child Development, Youth and Women Empowerment, and Vocational and Technical
Training ............................................................................................................................................. 17
5: FISCAL POLICY AND BUDGET FRAMEWORK ............................................................................. 20
5.1 Overview ..................................................................................................................................... 20
5.2 Fiscal Policy Framework ............................................................................................................ 20
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5.2.1 Observing Fiscal Responsibility Principles ......................................................................... 20
5.2.2 Fiscal and Public Financial Management Reforms .............................................................. 21
5.3 Budget Framework for 2018/19 .................................................................................................. 21
5.3.1 Revenue projections ............................................................................................................. 23
5.3.2 Expenditure Forecasts .......................................................................................................... 25
5.4 Risk Management ....................................................................................................................... 27
6.0 MEDIUM TERM EXPENDITURE FRAMEWORK ................................................................... 29
6.1 Overview ..................................................................................................................................... 29
6.2 Resource Envelope ...................................................................................................................... 29
6.3 Proposed Resource Allocation Prioritization Criteria ................................................................. 31
6.4 Overall Spending Priorities ......................................................................................................... 31
6.5 Baseline Ceilings ........................................................................................................................ 32
6.6 Medium Term Expenditure Ceilings ........................................................................................... 35
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LIST OF TABLES Table 1 2017/18 Supplementary 1 Expected Revenue ........................................................................... 6
Table 2: Direct Transfers from National Government ............................................................................ 7
Table 3: Local Revenue Collection Performance in the First half year of Financial Year 2017/18 ....... 8
Table 4: Comparison between Revenue Collection Performance in the First half of Financial Year
2017/18 and 2017/18 ............................................................................................................................... 9
Table 5: Recurrent Expenditure Analysis by Sector for the first half of the financial year 2017/18 .... 10
Table 6: Development Expenditure Analysis by Sector for the first half of the financial year 2017/18
.............................................................................................................................................................. 11
Table 7: Summary of Revenue Projections ........................................................................................... 14
Table 8: County Fiscal Projections for Financial Year 2018/19 – 2020/21 .......................................... 22
Table 9: Analyis of the Local Revenue Collection from Financial Year 2013/14 to Financial Year
2017/18 first half ................................................................................................................................... 23
Table 10: Local Revenue Projection ..................................................................................................... 24
Table 11: Recurrent Expenditure Forecast by sectors for Financial Year 2018/19 to 2020/21 ............ 26
Table 12: Development Expenditure Forecast by departments for Financial Year 2018/19 to 2020/21
.............................................................................................................................................................. 27
Table 13: Resource Envelope for Financial Year 2018/19 ................................................................... 30
Table 14: Development Expenditure Estimates by Sectors .................................................................. 31
Table 15: Baseline Ceilings .................................................................................................................. 32
Table 16 Medium Term Expenditure Ceilings..................................................................................... 36
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LEGAL BASIS FOR COUNTY FISCAL STRATEGY PAPER The County Fiscal Strategy Paper is prepared in accordance with section 117 of the Public
Finance Management Act, 2012 which states that:
a) The County Treasury shall prepare and submit to County Executive Committee the
County Fiscal Strategy Paper for approval and the County Treasury shall submit the
approved Fiscal Strategy Paper to the County Assembly, by 28th
February of each
year;
b) The County Treasury shall align its County Fiscal Strategy Paper with the National
objectives in the Budget Policy Statement;
c) In preparing the County Fiscal Strategy Paper, the County Treasury shall specify the
broad strategic priorities and policy goals that will guide the County Government in
preparing its budget for the coming financial year and over the Medium Term;
d) The County Treasury shall include in its Fiscal Strategy Paper, the Financial
Borrowing for the financial year and over the Medium Term;
e) In preparing the Fiscal Strategy Paper, the County Treasury shall seek and take into
account views of :
i. The Commission on Revenue Allocation (CRA);
ii. The Public;
iii. Any interested persons or groups; and
iv. Any other forum that is established by legislation.
f) Not later than fourteen days after submitting the County Fiscal Strategy Paper to the
County assembly, the County assembly shall consider and may adopt it with or
without amendments;
g) The County Treasury shall consider any recommendations made by the County
Assembly in finalizing the budget proposal for the financial year concerned; and
h) The County Treasury shall publish and publicize the County Fiscal Strategy Paper
within seven days after it has been submitted to the County Assembly.
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COUNTY GOVERNMENT FISCAL RESPONSIBILITY
PRINCIPLES The Public Finance Management (PFM) Act, 2012 sets out the following fiscal responsibility
principles to ensure prudence and transparency in the management of public resources:
a) The County Government’s recurrent expenditure shall not exceed the County
government’s Total Revenue;
b) Over the Medium Term, a minimum of 30 percent of the County government’s budget
shall be allocated to the Development expenditure;
c) The County Governments' expenditure on wages and benefits for its public officers
shall not exceed a percentage of the County government's total revenue as prescribed
by the Executive Committee Member for Finance in regulations and approved by
County Assembly and in line with the PFM act;
d) Over the Medium Term, the government's borrowing shall be used only for the
purpose of financing development expenditure and not for recurrent expenditure;
e) The County debt shall be maintained at sustainable level as approved by County
Assembly;
f) The fiscal risks shall be maintained prudently; and
g) A reasonable degree of predictability with respect to the level of tax rates and tax
bases shall be maintained taking into account any tax reforms that may be made in the
future.
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1: INTRODUCTION
1.1 OVERVIEW
The 2018, County Fiscal Strategy Paper (CFSP) is the first under the new administration
led by H.E Gov. Dr Mohamed Kuti. It is in accordance with the requirements of Public
Finance Management Act, 2012, section 117. The theme of the County Budget for the
Financial Year 2018/19 is to promote sustainable social economic growth and
development. Section 117(2) of the PFM Act requires the County Treasury to align its
County Fiscal Strategy Paper with the National objectives in the Budget Policy
Statement. The CFSP serves as a guide to the budgeting process and provides projections
of the County’s revenue, recurrent and development expenditures. It also examines the
anticipated risks in the medium term, structural measures and strategic interventions
required.
In pursuit of the theme of the budget for financial year 2018/19, the County Government
has identified key development priority areas that cover;
(i) Enhancing food security, sustainability of livestock based livelihoods and
commercializing of livestock
(ii) Investment in Infrastructure development and expansion i.e. Roads, Water Supply,
Market development, Livestock and agriculture transformation for sustainable
economic growth and development.
(iii) Investing in quality, affordable and accessible Health Services (i.e. preventative,
curative and rehabilitative health care services).
(iv) Investing in Education, focusing on construction of more ECD structures and
equipping of youth polytechnics, technical institutions as well as social
development of the communities through social programs.
(v) Promotion of trade and industrial development for a rapidly industrializing
economy.
(vi) Enhancing governance, transparency and accountability in the delivery of
services.
(vii) Investment in conflict resolutions by promoting initiatives for peaceful and
cohesive society where all have access to equitable share of resources;
(viii) Promotion of Public participation through involvement in decision making in
order to enhance ownership and sustainability of development programs;
(ix) Investing in Energy, Environmental conservation, natural resource management,
modern urban infrastructure and sustainable land management for socio economic
development
The above County Government key development priority areas are aligned to the
National Government Policy on economic transformative agenda that includes;
i. Sustained Investment in Social Services for the Welfare for all in health care,
education and social safety nets; and
ii. Creating a Conducive Business Environment for Investment Opportunities
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iii. Investing in sectorial transformation to ensure broad-based and sustainable
economic growth with a major focus on livestock and agricultural transformation
to ensure food security;
iv. Investing in infrastructure in areas such as transport, logistics, energy and water;
v. Further consolidating gains made in devolution in order to provide better service
delivery and enhance economic development.
1.2 Outline of the County Fiscal Strategy Paper.
The CFSP is organized as follows;
a. Chapter 1: Gives an introduction on the various laws governing the preparation of
the CFSP, plus the fiscal responsibility principles governing the budgeting
process.
b. Chapter 2: Outlines the economic context in which the 2018/19 MTEF budget is
prepared. It provides an overview of the recent economic development and the
macroeconomic outlook covering the national scene.
c. Chapter 3: Outlines the forward economic and fiscal policies and the budget
framework for the county.
d. Chapter 4: Gives an analysis of strategic priorities and interventions. It also gives
an analysis of the key priority sectors and interventions to be implemented.
e. Chapter 5: Provides fiscal policy and budget framework and it outlines the fiscal
framework that is supportive of growth over the medium term while continuing to
provide adequate resources to facilitate execution of policy priorities of the
County government of Isiolo.
f. Chapter 6: Gives a detailed analysis of the MTEF. It presents the resource
envelope and spending priorities of the proposed MTEF budget for the financial
year 2018/19 and the medium term. It further provides the proposed sector
ceilings and the baseline ceilings.
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2: RECENT ECONOMIC AND FISCAL DEVELOPMENT
2.1 Economic and Fiscal Overview
2.1.1Global and regional Overview
The global economy is estimated to have further expanded in 2017. In 2016 the global
economy expanded by 2.9 % compared to a revised growth of 3.1 per cent in 2015. Growth in
advanced economies expanded by 2.1 per cent in 2016 compared to 1.9 per cent in 2015. The
United States of America recorded a growth of 1.5 per cent in 2016 compared to 2.6 per cent
in 2015, mainly due to weak exports, subdued investments and uncertainty surrounding the
2016 elections. Growth in China decelerated on account of slowed investment as the
economy rebalanced towards services and consumption. In Japan, growth was boosted by
private consumer spending, signaling improved consumer purchasing power after two years
of contraction.
The IMF has indicated that global output is projected to increase to 3.8% in 2018 up from
3.6% in 2017 and 3.2 % in 2016 with notable upward surprises in Europe and Asia. Data
from the IMF also shows that some 120 economies, accounting for three quarters of the world
GDP have seen a pickup in growth in year on year terms in 2017, the broadest synchronized
global growth upsurge since 2010.
In the advanced economies, growth is expected to pick up to 2.3 percent in 2018 and 2017, up
from 1.7 percent in 2016. This forecast reflects the expectation that favorable global financial
conditions and strong sentiment will help maintain the recent acceleration in demand,
especially in investment with a noticeable impact on growth in economies with large exports.
In addition, the U.S. tax reform and associated fiscal stimulus are expected to temporarily
raise U.S. growth, with favorable demand spill over for U.S. trading partners especially
Canada and Mexico
The Sub-Saharan Africa’s real gross domestic product is estimated to have grown by 1.5 per
cent in 2016 compared to 3.8 per cent growth registered in 2015.
2.1.2 National Economic Overview
Kenya’s economy remained resilient in 2017 despite adverse weather conditions, a prolonged
electioneering period as well as subdued credit growth to the private sector which combined
to weaken growth in the first half of the year. Economic growth for 2017 is estimated at 4.8
percent from 5.8 percent in 2016 and is projected to bounce back to 5.8 percent in 2018.
The resilience in growth in 2017 was supported by the ongoing public sector infrastructure
investments, recovery in the tourism sector and continued stable macroeconomic
environment.
Consumer Price Index (CPI) increased from 183.05 points in December 2017 to 185.47
points in January 2018. The overall rate of inflation rose from 4.50 per cent to 4.83 per cent
during the same period.
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In January 2018, the Kenyan Shilling depreciated against the major trading currencies except
for the US Dollar, the Ugandan shilling and the Tanzanian shilling. The average yield rate for
the 91-day Treasury bills, which is a benchmark for the general trend of interest rates
increased from 8.01 per cent in December 2017 to 8.04 in January 2018, while the inter-bank
rate dropped from 7.27 per cent in December 2017 to 6.21 per cent in January 2018.
The Nairobi Securities Exchange (NSE) 20 share index increased from 3,711 points in
December 2017 to 3,737 points in January 2018, while the total number of shares traded rose
from 451 million shares to 862 million shares during the same period. The total value of NSE
shares traded increased from Kshs 11.87 billion in December 2017 to Kshs 20.34 billion in
January 2018.
Broad money supply (M3), a key indicator for monetary policy formulation, decreased from
Ksh 3,028.14 billion in December 2017 to Kshs 3,020.85 billion in January 2018. Gross
Foreign Exchange Reserves increased from Kshs 996.56 billion in December 2017 to Kshs
1,000.19 billion in January 2018. Net Foreign Exchange Reserves increased from Kshs
519.93 billion in December 2017 to Kshs 541.63 billion in January 2018.
The foreign exchange market has remained relatively stable supported by increased tea and
horticultural exports, strong Diaspora remittances, and a continued recovery in tourism. The
12-month current account deficit stabilized at 7.0percent of GDP in December 2017 and is
expected to narrow to below 6.0 percent of GDP in 2018 due to lower imports of food and
lower imports in the second phase of SGR project.
Growth of the services sector accelerated from 5.0 percent in 2012 to 6.8 percent in 2016
supported by favourable performance of ICT, real estate, wholesale and Retail Trade,
Transport and Storage and Accommodation and Restaurants. Accommodation and restaurants
has been the fastest growing sector. It grew from 3.1 percent in 2012 to 13.3 percent in 2016
supported by the improved security situation that led to removal of travel alerts from major
tourist originating countries.
The growth of the financial and insurance sector accelerated from 6.0 percent in 2012 to 9.4
percent in 2015 supported by reforms aimed at creating conducive business environment.
However, the growth of the sector slowed down to 6.9 percent in 2016 and is estimated at 3.2
percent in 2017 partly due low banking sector credit to the private sector and a decline in the
growth of interest income.
The industry sector grew from 3.5 percent in 2012 to 7.0 percent in 2015 supported by the
construction sector as a result of public infrastructural development. The sector slowed down
in 2016 and 2017 following subdued performance of the manufacturing and electricity and
water supply sectors.
Over the medium term, growth is projected to average around7.0percent due to investments
in strategic areas under “The Big Four” Plan, namely: increasing the share of manufacturing
sector to GDP; ensuring all citizens enjoy food security and improved nutrition by 2022;
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expanding universal health coverage; and constructing at least five hundred thousand
(500,000) affordable housing units. These efforts will support the business environment,
create jobs and ultimately promote broad based inclusive growth.
Kenya is ranked favourably in the ease of doing business and as a top investment destination.
In 2017, the World Bank’s Doing Business Report, ranked Kenya third in Africa in the ease
of doing business after Rwanda and Mauritius, as the country moved up 12 places to position
80. Further, in September 2017, Standard and Poor’s Global Ratings affirmed Kenya’s short
and long term foreign and local currency sovereign credit rating at B+/B citing Kenya’s
strong growth prospects which will facilitate fiscal consolidation.
2.1.3 National Fiscal Overview
Implementation of the FY 2017/18 budget is on course although performance is lagging
behind targets. In the first half of the year, revenue collection lagged behind targets due to the
under performance of the main revenue tax heads. On the other hand, there have been
elevated expenditures pressures as a result of the adverse spill over effects of the prolonged
drought, the repeat of the Presidential Elections and salary demands by Universities Staff and
Health Workers.
By end of December 2017, total cumulative revenues including A-I-A collected amounted to
Ksh 709.4 billion (equivalent to 8.1percent of GDP) against a target of Ksh 777.7 billion (8.8
percent of GDP). The recorded shortfall of Ksh 68.3 billion was due to under performance of
the ordinary revenues by Ksh 44.8 billion and the ministerial A-I-A by Ksh 23.5 billion. The
shortfall in ordinary revenue was on account of underperformance in all the broad categories
of ordinary revenues.
Total expenditures amounted to Ksh 907.0 billion against a target of Ksh 1,029.3 billion
falling below target by Ksh 122.3 billion at the end of December 2017. The shortfall was
due to lower than projected disbursements to County Governments due to the delayed
enactment of the County Allocation of Revenue Act as well as below target absorption of
development expenditures despite the faster spending in the recurrent expenditures by the
National Government. Recurrent expenditure amounted to Ksh 647.0 billion against a target
of Ksh 616.2 billion, representing above target spending of Ksh 30.8 billion. The faster-
spending was mainly recorded in operations and maintenance which accounted for Ksh 35.6
billion and higher than programmed domestic interest payments of Ksh 17.6 billion.
2.2 County Economic and Fiscal Overview
2.2.1 County Economic Overview
Livestock keeping is the mainstay of Isiolo County economy. About 80 percent of the
inhabitants derive their livelihood from livestock enterprise. The livestock production
employs about 70 percent of the rural labour force. The County is endowed with enormous
livestock resources. The estimated livestock population is 198,424 heads of cattle, 398,903
goats, 361,836 sheep and 39,084 camels (2009 census). The main drawbacks to the
improvement of the livestock production include: poor governance of the rangelands largely
due to the absence of an appropriate legal framework of land tenure, livestock diseases,
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frequent droughts and sometimes flooding, lack of an organized market for livestock and
livestock products, and inappropriate and inadequate systems of social and financial service
provision.
The Completion of Isiolo International Airport, LAPSSET Project and Isiolo resort city is
expected to stimulate rapid economic growth. These projects will turn Isiolo town into a
major tourist destination and a regional economic hub. It will open up the northern frontier,
thereby attracting both domestic and foreign investments. The completion of Isiolo abattoir
will improve the livelihoods of Isiolo people through improvement of livestock market.
2.2.2 County Fiscal Overview
The revised Approved Budget for the Financial Year 2017/18 amounts to Kshs.4, 340,282,
474, with Kshs. 2,765,692,084 (63.72 percent) allocated for recurrent expenditure and Kshs.
1,574,590,390 (36.28percent) for development expenditure.
2.2.2.1 County Revenue Analysis
In order to finance the budget for the Financial Year 2017/18, the County Government is
expected to receive the following total revenue as shown in the table below.
Table 1 2017/18 Supplementary 1 Expected Revenue ITE
M
TITLE 2017/19
REVISED
ESTIMATES
Percenta
ge (%)
REVENUE BUDGET
A EXTERNAL REVENUE ESTIMATES
EQUITABLE SHARE 3,775,000,000 86.98
General Provisions (Equitable Share) 3,775,000,000 86.98
CONDITIONAL ALLOCATIONS FROM NATIONAL
GOVERNMENT REVENUE ACCOUNT
280,870,017 6.47
Funds Received from Road Maintenance Levy Fund 130,230,858 3.00
Funds Received from Health Care Services Fund (User fee foregone) 3,472,461 0.08
Medical equipment - 0.00
Free Maternity Fund - 0.00
Supplement for Construction of County Headquarters 121,000,000 2.79
conditional allocation for development of youth polytechnic 26,166,698 0.60
CONDITIONAL ALLOCATIONS FROM DEVELOPMENT
PARTNERS
101,551,120 2.34
Current Grants from Foreign Governments Danida 13,678,677 0.32
Kenya Devolution Support Programme (KDSP) World bank 36,113,321 0.83
world bank loan to supplement financing of county health facilities 12,607,500 0.29
world bank loan to supplement financing of county health facilities
B/f from 2016/17
18,454,800 0.43
world bank loan for transforming health systems for universal care
project
20,696,822 0.48
B GROSS INTERNAL REVENUE ESTIMATES 182,861,337 4.21
GROSS COUNTY EXTERNAL REVENUE ESTIMATES 4,340,282,474 100.00%
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Revenue Received from exchequer as at 31st December 2017
In the first half of financial year 2017/18, the County received Ksh. 995,808,597 comprising
of Ksh 941,839,326 from the National Government as a direct transfer to the County Revenue
Fund Account and 53,969,271 rose from local sources. The table 2 below provides a
summary of the revenues received from the National Government during the first half of the
financial year 2017/18.
Table 2: Direct Transfers from National Government
Revenue Source Revised Approved
Budget Kshs
Actual Cumulative
Receipts Kshs
Equitable Share (Exchequer Releases) 3,775,000,000 868,250,000
General provisions (equitable shares) 3,775,000,000 868,250,000
Transfers From National Government Entities 280,870,017
Transfers from Central government entities
Transfer from Ministry of Health 3,472,461
Conditional allocation for development of youth
polytechnic
26,166,698 -
Funds received from road maintenance levy 130,230,858 60,736,583.00
Supplement for construction of county headquarters 121,000,000
Total
Grants Received From Bilateral Donors (Foreign
Governments)
Grants Received From Multilateral Donors
(International Organizations)
Current grants from foreign governments(DANIDA) 13,678,677 8,824,953
World Bank 0
Kenya Devolution support programme (KDSP) 36,113,321
World Bank loan to supplement financing of county
health facilities
12,607,500 20,696,822
World Bank loan to supplement financing of county
health facilities (B/F from FY 2016/17)
18,454,800
Local Revenue 182,861,337 53,969,271
Total Kshs 4,340,282,474 995,808,597
The total supplementary 1 revenue estimate for fiscal year 2017/18 is Kshs. 4,340,282,474
these includes Kshs. 182,861,337 from local revenue sources, Kshs.3,775,000,000 equitable
share of revenue from National Government, Kshs. 280,870,017 additional conditional
allocations from National Government, Kshs 101,551,120 conditional allocation from
development partners from loans and grants to County Government.
The table 3 below provides a summary of the local revenue collected against the target during
the half of financial year 2017/18.
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Table 3: Local Revenue Collection Performance in the First half year of Financial Year
2017/18
N
o.
Revenue Stream Targeted Receipts
(Ksh.)
Actual Receipts
(Ksh.)
Revenue
Performance
(%)
1 Sand 5,450,000 3,416,740 63%
2 Livestock Auction 2,404,088 1,645,140 68%
3 Miraa Export 1,959,078 531,710 27%
4 Produce Cess/Barter/Murram/Cheque
Clearance
1,156,269 532,830 46%
5 Property Taxes -
6,598,538
2,200,000
-
554,331
506,100
8%
23% 1.Land Rent & Rates - Current
2.Land Rent & Rates - Arrears
6 3.Penalties Rent & Rates 500,000 541,744 108%
7 Stand Premiums 628,512 - 0%
8 Plot Application/Transfer/Sub-
Division
1,620,000 347,000 21%
9 Clearance & Consents 139,973 60,000 43%
10 Plot Transfer Approval 1,295,359 72,200 6%
11 Lease Extension 100,000 - 0%
12 Planning & Survey 818,000 - 0%
13 Kiosks & Stalls 760,873 66,900 9%
14 Miscellaneous Charges - -
15 Other Miscellaneous Charges (
Ground Rent)
750,000 1,615,016 215%
16 Parking Fees / Bus Park 3,240,000 2,018,100 62%
17 S.B.P Fees/Promotion 2,999,001 1,520,145 51%
18 Slaughter Fees 996,677 640,780 64%
19 4%Water Levies Iwasco 1,188,000 - 0%
20 Public Works /Other Charges 200,000 524,000 262%
21 Building Plan Approvals 1,854,691 17,500 1%
22 Liquor Licence 400,000 - 0%
23 Hospital Cost Sharing 8,024,595 1,693,925 21%
24 Livestock/Veterinary 932,000 285,740 31%
25 Tractor Hire 499,953 31,000 6%
26 Agriculture Training Centre 400,000 - 0%
27 Weights And Measures 250,000 - 0%
28 Game - -
29 Game Entrance & Royalties 44,065,065 37,348,370 85%
Grand Total 91,430,669 53,969,271 59%
The local revenue raised during the first half of the financial year 2017/18 was Ksh
53,969,271 compared to Ksh 58,136,757 collected in the first half of the financial year
2016/17. This shows an overall decrease of 7 percent in the total local revenue realised.
Overall all revenue sources reflected a decline except public works and ground rent.
9
Table 4: Comparison between Revenue Collection Performance in the First half of
Financial Year 2017/18 and 2017/18
Revenue Source Actual Receipts in
the first half of
2016/17 (Ksh.)
Actual Receipts in
the first half of
2017/18 (Ksh.)
Deviation
1 SBP & Promotions Fee 780,560 1,520,145 739,585
2 Agri. Produce Cess/Barter/Market
Entrance/Tractor
0 0
3 Livestock Cess 1,430,623 1645140 214,517
4 Sand Cess 3,121,000 3,416,740 295,740
5 Miraa Cess 855,770 531,710 -324,060
6 Clearance & Consent 108,004 60,000 -48,004
7 Tender Doc Sales 0 0 0
8 Water Connection Fee 0 0 0
Water Levies 806,723 0 -806,723
9 Murram Cess 506,380 -506,380
10 Parking Fee 2,232,360 2,018,100 -214,260
11 Slaughter Fee 691,880 640,780 -51,100
12 Hides & Skin 0 0 0
13 Land Rates & Rents 5,091,464 1,602,175 -3,489,289
14 Plot transfer/ Subdivision/
Registration/ Approval/Application
1,278,300 347,000 -931,300
15 Lease Extension 0 0 0
16 Physical Planner 0 0 0
17 Planning & Survey Fee 0 0 0
18 Building Approval 40,390 17,500 -22,890
19 Stand Premium 22,000 0 -22,000
20 Market stalls/Kiosks 85,550 0 -85,550
Other Sectors 0
21 Hospital 5,788,287 1,693,925 -4,094,362
22 Liquor Application 22,000 0 -22,000
23 Fisheries 0 0 0
24 Public Health 0 0 0
25 Livestock/Veterinary/Meat
Inspection
328,740 285,740 -43,000
26 Rent/Hire/Tractor Hire 0 31,000 31,000
27 Movement permit 0 0 0
28 Weight and Measures 0 0 0
29 Game collection 34,946,726 37,348,370 2,401,644
Grand Total 58,136,757 53,969,271 -4,167,486
2.2.2.2 County Expenditure Analysis
The County spent a total of Ksh. 1,022,023,392 during the first half of financial year 2017/18
against approved budget of Ksh. 4,340,282,474 which represents an absorption rate of 24
percent of the total funds released for recurrent and development. This is an absolute decline
in comparison to similar period of financial year 2016/17 which was 72.97 percent of the
total funds released. A total of Ksh793, 600, 819 was spent on recurrent activities. While total
of Ksh 49.5 Million was spent on development in the first half financial year 2017/18.
10
The recurrent expenditure for the period under review represented 33 percent of the approved
annual recurrent budget; the rate spent was 65% in a similar period of financial year 2016/17.
Development expenditure recorded an absorption rate of 3 percent, a drop from 6 percent
(County) spent in a similar period of financial year 2016/17.
Recurrent Expenditure Analysis
The total recurrent expenditure during the review period (first half of the financial year
2017/18) was Ksh 785,120,509 against a total budget of Ksh 1,228,431,054 representing
absorption rate of 65 percent. The table 5 below provide the analysis of recurrent expenditure
and budget absorption rate by sectors.
Table 5: Recurrent Expenditure Analysis by Sector for the first half of the financial
year 2017/18
Approved Recurrent Budget for First
half of Financial Year 2017/18
Approved Recurrent
Budget for First half of
Financial Year 2017/18
Actual Recurrent
Expenditure for First half
of Financial Year 2017/18
Absorptio
n Rate (%)
County Assembly Services 194,276,820 157,404,659 81
Governor County Executive 201,326,721 108,620,177 46
Finance and Economic planning 144,894,380 109,230,988 75
Land, Roads, Urban planning, Housing
and Public works
27,924,814 16,510,206 59
Agriculture, Livestock, Veterinary and
Fisheries
68,735,749 56,793,739 83
Cohesion ,Intergovernmental Relation,
Aid Coordination, Disaster management
and Climate change
52,325,000 8,480,310 16
Education, Vocational Training, Youth,
Sports and Gender
51,285,000 40,316,033 79
Tourism, culture and social services 74,012,250 52,301,861 71
County Administration ,Public service
management and ICT
32,453,060 11,609,401 36
Water, Irrigation, Energy, Environment
and natural resources
41,433,343 29,399,129 71
Health services 489,518,788 349,479,514 71
Trade, Industrialization, Cooperative and
Enterprises Development
8,203,948 7,373,192 90
Town Admin Town Administration
Board
6,093,001 3,486,269 57
Total 1,228,431,054 793,600,819 65
Development Expenditure Analysis
The total development expenditure during the review period (first half of the financial year
2017/18) was Ksh 79,498,224 against a total budget of Ksh 762,508,668 representing
absorption rate of 6 percent. The table 6 below provides the analysis of development
expenditure during the first half of the financial year 2017/18.
11
Table 6: Development Expenditure Analysis by Sector for the first half of the financial
year 2017/18
Sector Approved Development
Budget for first half of
Financial Year 2017/18
Development
Expenditure
Absorpti
on Rate
(%)
County Assembly Services 78,706,966 29,973,975 38
Governor County Executive 144,000,000 35,300,000 25
Finance and Economic planning 129,750,000 13,012,680 10
Land, Roads, Urban planning, Housing and
Public works
72,615,429 - 0
Agriculture, Livestock, Veterinary and
Fisheries
60,278,540 - 0
Cohesion ,Intergovernmental Relation, Aid
Coordination, Disaster management and
Climate change
16,000,000 - 0
Education, Vocational Training, Youth,
Sports and Gender
44,583,349 - 0
Tourism, culture and social services 16,000,000 - 0
County Administration ,Public service
management and ICT
10,000,000 0
Water, Irrigation, Energy, Environment and
natural resources
67,512,500 1,211,569 2
Health services 96,348,411 - 0
Trade, Industrialization, Cooperative and
Enterprises Development
11,500,000 0
Town Admin Town Administration Board 40,000,000 - 0
Total 787,295,195 79,498,224 10%
12
3. FORWARD ECONOMIC AND FISCAL DEVELOPMENTS
3.1 National Forward Economic and Fiscal Development
The fiscal policy stance over the medium term aims at supporting rapid and inclusive
economic growth, ensuring a sustainable debt position and at the same time supporting the
devolved system of Government for effective delivery of services. The fiscal policy also
indicates Kenya’s deliberate convergence path towards the East African Community
Monetary Union Protocol’s fiscal targets. That is, the EAC targets of a fiscal deficit ceiling
including grants of 3 percent of GDP and excluding grants 6 percent of GDP.
The fiscal policy underpinning the FY 2018/19 budget and MTEF will sustain the revenue
projections in line with recent mobilization trends in order to maintain fiscal predictability.
Revenue is projected to increase from 18.3percent of GDP in FY 2016/17to 19.2percent of
GDP in FY 2020/21.
In an effort to boost domestic revenue mobilization, the Government is going to undertake a
combination of policy and administrative reforms to bolster revenue yields going forward.
These efforts will reverse the revenue losses experienced in the recent past where ordinary
revenues have declined about 1.0 percent of GDP from 18.1 percent in FY 2013/14 to 17.1
Percent in FY 2016/17.In the medium term, ordinary revenues are projected to increase to
17.7 percent of GDP in FY 2020/21 from 17.1 percent of GDP in FY 2017/18. The additional
resources are expected to support the fiscal consolidation program and bring the fiscal deficit
down to 3.0 percent of GDP by FY 2021/22 from the projected 7.2 percent of GDP in FY
2017/18.
Total expenditures and net lending is projected to decline from 26.8percent of GDP in FY
2017/18 to 25.5 percent of GDP in FY 2018/19 and 22.5percent of GDP in FY 2021/22. This
takes into account the Government’s efforts to increase the efficiency, effectiveness,
transparency, and accountability of public spending, in order to ensure that there is sufficient
fiscal space for priority social and investment projects.
The overall fiscal deficit inclusive of grants is therefore projected to decline from 9.1percent
of GDP in FY 2016/17 to 7.2percent of GDP in FY 2017/18, 6.0 percent in FY2018/19 and
Further to 3.0 percent of GDP by FY 2021/22. Excluding expenditures related to the SGR,
the deficit declines from 7.5percent of GDP in FY 2016/17to 6.5percent of GDP in FY
2017/18 and 2.5 of GDP by FY 2021/22.The lower deficit reflects the projected completion
of key infrastructural projects being implemented by the Government, enhanced revenue
collection and prudent public spending.
3.2 County Forward Economic and Fiscal Development
3.2.1 County Forward Economic Development
For more than 50 years, the policy makers considered the County as being of low potential
and were ignored. The post-independence successive governments’ neglects led to acute
economic and social underdevelopment in the region. The lack of infrastructural development
closed the region from the rest of the country and escalated marginalization that bred other
13
forms of conflagration such as cattle rustling and insecurity. It is with advent of the devolved
system of government that the County is put on a new development trajectory.
The County Government has embarked on a serious move to exploit the existing economic
potentials to transform the County into a developed, just and cohesive where all enjoy high
quality of life. Much emphasis is put on increasing livestock and crop productivity and
expanding food production through irrigation and enhancing value addition. Effort is being
made to achieve land titling (land tenure security) and expansion in investment on physical
infrastructure as well as promotion of green energy (Solar and Wind). The County
government strives to support growth in tourism and hospitality sector as well as wholesale
and retail trade. All these initiatives are expected to increase the County government fiscal
space.
Over the medium term, the County Government will put more effort in promoting the County
as a development hub both locally and internationally. This is because the County is a
gateway to Northern Kenya which is becoming a new development frontier in Kenya. It is
also a cultural melting pot for different cultures in northern Kenya region. The large untapped
resources which include oil and gas, minerals such as sapphire and gold, diversified and large
number of livestock and game reserves is also expected to attract both foreign direct and
domestic investments.
The County is also a host to key National flagship projects such as the LAPSSET corridor,
the proposed resort city, the international airport, oil refinery, pipeline, railway station and an
international abattoir. These projects are expected to spur rapid economic growth and
transform the County to an economic hub.
Isiolo County has a huge renewable energy potential. Preliminary wind resource assessment
shows that wind regime enjoys wind speeds ranging from 8 to 14 meters per second. The
County therefore has a potential to produce over 150 megawatt (MW) of wind power for sale
to the national grid.
In the manufacturing sector, the County is well positioned to harness the resources available
in different parts of the country to establish a vibrant manufacturing hub. Investment
opportunities exist in development of Industrial Parks including small and medium
enterprises (SME), and Export Processing Zones (EPZs) which will offer a range of fiscal
incentives that help in reducing start up and operational costs; making exporters
internationally price competitive.
The tourism industry in the County is expected to be very vibrant with the proposed
development of the resort city. The resort city will attract lucrative investment opportunities
which include construction of international hotel chains, investment in conference facilities,
international standard performance venues and entertainment facilities such, clubs, casinos,
amusement parks, art galleries, museums, jet skiing and golf courses.
Livestock production accounts for 12 percent of the national GDP and over 40 percent of
these livestock is found in the County. With the completion of the world-class abattoir with a
capacity to slaughter 1000 sheep and goats, 300 cows and 100 camels daily, the County is set
14
to be the leading livestock products exporter in Kenya. This is expected to spur growth in
related industries such as animal feeds, tanneries and leather processing plants which will
contribute immensely to economic growth.
3.2.2 County Fiscal Overview
3.2.2.1 County Revenue Analysis
In order to finance the budget for the Financial Year 2018/19, the County Government is
expected to receive from National Equitable share Ksh 3,925,000,000 Medical equipment
worth Ksh.200, 000,000, Fuel Levy worth Ksh. 103,341,833, Rehabilitation of Polytechnics
worth Ksh. 21,235,000 and User Fee Foregone worth Ksh. 3,472,461 from the National
Government transfers.
The County is further expected to receive grants worth Ksh. 361,523,006. The Local Revenue
was however projected at Ksh. 150, 861,337.The table 1 below provides a summary of the
revenue projections.
Table 7: Summary of Revenue Projections
Revenue Source
Amount(Ksh)
Percentage
National Equitable Share 3,925,000,000 83
Conditional Grants
Supplement to construction of County Head Quarters 121,000,000 3
Fuel Levy 103,341,833 2
Rehabilitation of village Polytechnics 21,235,000 0.45
User Fee Foregone 3,472,461
Donor Funds
Universal health care in devolved system program
(DANIDA)
12,656,250 0.27
Transforming Health System for universal health care
(WB)
66,229,830 1
Climate Smart Agricultural Project(WB) 150,000,000 3
Urban Support Project(WB) 93,968,100 2
Urban Support Project(WB)-Dev 41,200,000
Kenya Devolution Support Project(WB) 38,668,826 1
Local Revenue 150,861,337 3
Total 4,727,633,637 100
leasing of Medical Equipment 200,000,000 Deducted at
source
15
4: STRATEGIC PRIORITIES AND INTERVENTIONS
4.1 Overview
Over the Medium-Term the County government is targeting supporting growth in the
following priority areas;
4.2 Livestock and Crop Productivity
Livestock production is the backbone of the County’s economy. About 80 percent of the
inhabitants derive their livelihoods from livestock related enterprises. The livestock sub
sector employs about 70 percent of the rural labour force. The County is endowed with
enormous livestock resources.
However the County has huge unexploited potential for livestock production. The major
challenges facing livestock production include:
i. Inadequate resources in terms of funding on planned activities due to low
budgetary provisions.
ii. Insufficient transport means to do the outreach services as per the annual work
plans because the sector has no vehicle.
iii. Insecurity and inter clan skirmishes hinders the smooth operation of service
delivery.
iv. Expansiveness of the county overstretches the already inadequate technical staff
offering extension service
v. Inadequacies in human resource developments and management especially in
matters to training, promotion and facilitation
vi. Lack of decentralized funds from the county level to the sub counties paralyzing
service delivery at that level.
vii. Frequent droughts and flooding
viii. Lack of an organized market for livestock and livestock products.
This year’s budget will therefore focus on measures to promote the development of the
livestock sub-sector by:
i. allocating enough funds for the livestock sub-sector
ii. purchasing vehicles to facilitate movement of technical staff
iii. promoting cohesion among the neighboring communities
iv. employing and deploying technical staff to the sub-counties
v. coming up with mitigation measures to curb the effects of drought and floods
vi. Developing an efficient livestock marketing system that capitalize the full potential
of the livestock economy
On crop productivity, the budget will focus on;
i. Provision of subsidized seeds and fertilizer to farmers;
ii. Support of existing irrigation projects and creation of more irrigation projects
iii. Agricultural Mechanization that will increase efficiency and reduce production
costs
16
iv. Up scaling of Capacity Buildings Programmes for farmers through extension
services.
4.3 Developing both Surface and Underground Water Sources
The County government recognizes that 80 percent of the inhabitants lack access to clean
and safe water within five kilometers reach. 73 percent of the rural areas rely on water
sources that are unsafe and are about 25 kilometers of reach during the dry season.
Further, the livestock walking distance without stress is estimated at 10 kilometers yet 74
percent of pastoralist walk over 25 kilometers to the nearest water sources during the dry
season.
The main challenges experienced in the sector include;
i. Delay in procurement due to challenges of the e-procurement system.
ii. Inadequate technical personnel for design and supervision of projects
iii. Inadequate financing
iv. Frequent breakdowns of existing and dilapidated water supplies.
v. Inadequate community capacity to run and manage the completed water projects
vi. Frequent droughts that constrain the allocated resources due to emergencies that
require emergency interventions such as water trucking and borehole breakdown
repairs
In quest of the theme of this year’s budget, the County will focus on continued investment in
both surface and ground water sources with an aim of making water safe, adequate, reliable,
and affordable. The County government will focus on:
i. Increasing funding for drilling and equipping of boreholes in rural areas;
ii. Increasing funding towards rehabilitation of the rural and urban water supply;
iii. Increasing funding for water conservation structures such as dams, water pans and
sand dams;
iv. Increasing funding towards the protection of water catchment areas;
v. Increasing funding towards appropriate water treatment technologies in rural
areas; and
vi. Increasing funding towards strengthening institutional capacity in the water sector.
vii. Employment of more technical staff
viii. Investing in wind and solar energy to improve water supply
4.4 Access to Quality and Affordable Health Services
The County has a poorly distributed health facility network with a number of rural areas
people walking for over 15 kilometers to access health services. Most of the health facilities
are in poor conditions and require rehabilitation. The service delivery is equally affected by
shortage of technical staff, inadequate supply of medical equipment and medical
supplies/commodities.
County Health indicators remain alarming with the leading cause of mortality being
HIV/AIDS at 4.2 percent and Gunshots at 13.4 percent. Maternal Mortality rate currently
stands at 48 deaths per 1,000. Less than 5 Mortality rate is at 56 deaths per 1000 live births.
Infant Mortality rate is 43 per 1000 live births. Neonatal Mortality rate is 31per 1000 births.
17
The budget for financial year 2017/18 will focus on reversing the rising burden of
communicable and non-communicable conditions by minimizing the health risks through:
i. Equipping, provision of drugs and medical equipment to all health care
centers;
ii. Rehabilitation and equipping of the existing health facilities
iii. Purchase of more ambulances;
iv. Strengthening health management information system; and
v. Strengthening collaboration with private and other sectors that have an impact
on health improvements.
4.5 lands, physical planning Road, Infrastructure, Public Works Housing
and Urban Development
Under land sub sector the county will concentrate on development of county spatial and
titling of land in Isiolo central.
The County has an estimated road network of 975.5 kilometres of which only 34 kilometres
is bituminized. Gravel surfaced roads account for 22 percent while earth surfaced roads
account for 75 percent of the total road surface. Most gravel surface roads are impassable
during wet season while all the earth surface roads are impassable during the wet season.
The County government will continue to upgrade all the non-paved standards roads into all-
weather roads. Specifically, the budget for the financial year 2018/19 will focus on:
i. Rural roads improvement. This will involve routine maintenance of existing roads
and opening of new ones to ease accessibility to urban centres and markets,
construction of new and rehabilitation of old bridges, drifts, and culverts.
ii. Urban Roads and storm water control Improvement. The government will
continue to upgrade Isiolo Town roads to paved standards. More investments will
also be targeted at improving and develop Isiolo town drainage systems
4.6 Early Child Development, Youth and Women Empowerment, and
Vocational and Technical Training
According to the 2009 population census, 79 percent of County’s population is under 35
years of age. Youth (using the term to include those between 15 and 35 years of age) number
49,063 or about 34 percent of the population. Due to high levels of unemployment, most of
them are idle and not engaged in any productive and gainful activities.
The challenges specific to Early Childhood Development include:
i. Inadequate and poor Early Childhood Development infrastructure
ii. Inadequate funding to support School feeding program for ECD
iii. Nomadic life and failure of mobile schools programme.
iv. High illiteracy rates in the community
The County government recognises that youth related issues are important to be left out. A
healthy and vibrant youth population is a valuable asset to our County. This budget will seek
to invest in youth programmes for them to make positive contribution to society.
18
The County government will therefore facilitate the youth through addressing youth related
challenges and more specifically unemployment and empowerment, efforts will be made by
the County government to initiate youth development programmes which will include:
i. Youth Training
Most of our youth either drop out of school or graduate without necessary
skills for self-employment. Many girls drop out of school due to early
marriages and pregnancy. Vocational and technical training institutions in the
County are inadequate and lack the essential facilities and technology to
prepare trainers for the challenging market demands.
The County government will therefore ensure that adequate resources are
given to these institutions to enable the young people acquire skills that are
required in the job market.
ii. Youth Talent Search
The County government will develop Talent Search Academies which will
provide youth with the opportunity to discover their talents.
iii. Youth and Environment
Degradation of the environment through pollution and poor waste
management is a major challenge in the county. The County government will
continue to engage youth and youth organizations in activities aimed at
protecting the environment.
iv. Youth Crime and Drugs
The County has seen a rapid growth in insecurity cases due to rise in drug and
substance abuse, like Miraa and bhang. Drug abuse is highly associated with
crimes and risks of contracting HIV/Aids and other sexually transmitted
diseases among the youth. In this budget, the County government will allocate
resources to rehabilitate the youth already in alcohol and drug abuse.
4.7 Tourism Promotion
The County has a huge potential in tourism since it is strategically endowed with both natural
beauty and abundance of fauna and flora including species which are endemic to the region
like Grey Zebra, reticulated giraffe, Somali ostrich, lesser kudu and Beisa Oryx. The County
is also endowed with diverse and rich cultural heritage from various ethnic groups living
within the County which if marketed has the potential to generate income and create jobs.
The sector will focus on increasing the number of tourists visiting the County; reduce
incidences of human-wildlife conflict by working hand in hand with the Kenya Wildlife
Service, the community and conservancies within the county. To achieve its objectives, the
sector will focus on;
i. Infrastructure improvement in the parks including park roads and staff houses;
ii. Diversification of tourism products e.g. culture, sport, film shooting, and bird
shooting;
iii. Promotion of community wildlife conservancies;
19
iv. Promotion of Bisanadi Game Reserve; and
v. Marketing of the tourism products both locally and internationally.
4.8 Finance and Economic Planning The County government recognises provision of better working conditions for its personnel
and revenue enhancements are very critical and are very important to be left out. This budget
will seek to invest in construction of county headquarters and Isiolo market for it to make
savings from office rent and revenue enhancement for positive contribution to society.
4.9 Administration and Public Service Management Under this sector the county will concentrate on development of governor’s residence and
construction of wards offices.
4.10 County Assembly Under this sector the County will concentrate on development of Speakers’ residence
20
5: FISCAL POLICY AND BUDGET FRAMEWORK
5.1 Overview
The Medium-Term Fiscal Framework aims at stimulating economic growth and at the same
time achieving a balanced fiscal policy. The main objective is to support speedy investment
and effective delivery of public goods and services in a sustainable manner. Much emphasis
is placed on prudent fiscal policy to reinforce County Government’s commitment to
responsible financial management practices as outlined in the Public Finance Management
Act 2012.
The policy aims at shifting more public resources from recurrent to development expenditure
so as to promote sustainable and inclusive growth in the long run. Specifically, over the
medium term, at least 30 percent of the budget shall be allocated to development expenditure.
Much emphasis will be put on efficiency and improving the productivity of expenditure while
at the same time ensuring that adequate resources are available for operations, maintenance,
and development. Expenditure will promote equitable development as well as making
provisions for any marginalized groups in the County.
5.2 Fiscal Policy Framework
Medium-Term Fiscal Framework is targeted at supporting sustainable social economic
growth and development The growth trajectory will be biased towards Livestock ;
development of surface and underground water resources; provision quality and affordable
health services; development of road infrastructure network; promotion of early childhood
education, youth and women empowerment, vocational and technical training ; and tourism
promotion.
The overall budget deficit is expected to remain at zero in the short term. In the long term,
however, efforts will be made to maintain the budget deficit at less than a figure approved by
the County assembly of total expenditure to secure fiscal sustainability.
The fiscal policy will be achieved through the County government’s commitment in ensuring
a strong revenue base. The measures to achieve this is already contained in the County
Finance Act, 2015 and this it is in line with best practices that will help improve compliance
in payment, minimize delays, and strive towards the revenue potential of the County. Further,
the County treasury will develop and implement initiatives that will rationalize existing tax
incentives, expand the tax base and eliminate the possibility of revenue leakages.
5.2.1 Observing Fiscal Responsibility Principles
The County Government knows that the fiscal position it takes today will have implications
into the future. Therefore, in line with the Constitution and the Public Finance Management
(PFM) Act of 2012, the principle of sharing the burdens and benefits of the use of resources
between the present and future generation implies that we have to make prudent policy
decisions.
The ratio of development to recurrent expenditure will be at least 30:70 over the medium
term, as set out in the law. In order to address the risks associated with wage bill and other
operational and expense crowding out development, the proportion will be managed in a
21
manner that it should decrease or remain constant as the total expenditure increases. To
ensure that the County Government get competitive rates for goods and services from its
suppliers, payments shall be made on timely basis to forestall confidence and
creditworthiness.
The County Government is also guided by Article 201 of the Constitution of Kenya that
provides the public finance principles to be followed that include openness, accountability
and public participation in financial matters. In this regard the County will involve the Public
in developing priority programmes/projects for implementation. The County government
shall also involve the various stakeholders in determining fees and levies for services offered
which are expected to be fair with the overall goal being to promote equitable development of
the County.
The County plans to raise its revenue through efficient collection methods, widening of
revenue base, and applying reasonable revenue rates. It is therefore imperative to reform and
modernize the revenue regimes to ensure stability of revenue effort, while at the same time
continuing to restructure expenditure systems to ensure efficiency and create fiscal space
required to fund priority programmes on sustainable basis.
5.2.2 Fiscal and Public Financial Management Reforms
The County Government shall strengthen enforcement and restructure the organizational
structure of finance department to enhance collection of revenues. Revenue automation will
be applied to all key revenue collection points.
Reforms in policy, planning and budgeting will focus on strengthening data
collection/analysis and reviewing budget procedures to ensure budget formulation process is
appropriately integrated with planning.
The County Government will undertake a number of measures in improving revenue and
expenditure performance. These include modernizing revenue administration infrastructure to
ensure efficient and effective service delivery. The County will continue with expenditure
management reforms to improve efficiency and reduce wastage in line with the PFM Act
(2012) and embracing the Integrated Financial Management Information System (IFMIS)
To ensure full stakeholder participation, transparency and accountability, and adherence to
the PFM Act on budget process, public consultation shall be ensured on all matters of
planning and budgeting.
5.3 Budget Framework for 2018/19
The budget framework for financial year 2018/19 targets strategic priorities outlined in the
Annual Development Plan for financial year 2018/19 and County Integrated Development
Plan 2018-2022. The County Government will continue to re-direct most of its expenditure
from non-core recurrent items to finance development activities. During the medium term,
the County government will continue to diversify its revenue sources with great emphasis on
22
developing new revenue streams. Public Private Partnerships (PPPs) will be encouraged in
order to create fiscal space, which is important for development.
Total projected County revenue is expected to increase from Kshs 4,340,282,474 in the
financial year 2017/18 to Kshs. 4,727,633,637 representing a 9 percent increase. The table 8
below shows the County Fiscal Projections over the medium term.
Table 8: County Fiscal Projections for Financial Year 2018/19 – 2020/21
Total revenue
CFSP 2018
FY 2017/18
Approved Budget
Estimates For FY
2018/19
Projection For
FY 2019/20
Projection For
FY 2020/21
Equitable Share from National
Government 3,775,000,000 3,925,000,000 4,356,750,000 4,835,992,500
Construction of HQ 121,000,000 121,000,000 134,310,000 149,084,100
Fuel Levy 130,230,858 103,341,833 114,709,435 127,327,472
User forgone Fees 3,472,461 3,472,461 3,854,432 4,278,419
rehabilitation of Youth
Polytechnic 26,166,698 21,235,000 23,570,850 26,163,644
loans and grants( Danida and
world bank) 13,678,677 12,656,250 14,048,438 15,593,766
Transforming Health System for
universal health care 20,696,822.00 66,229,830 73,515,111 81,601,774
Climate Smart Agricultural
Project 0 150,000,000 166,500,000 184,815,000
Urban Support Project-
Development 0 93,968,100 104,304,591 115,778,096
Urban Support Project-
Recurrent 41,200,000 21,600,000 21,600,000
Kenya Devolution Support
Project 36,113,321.00 38,668,826 42,922,397 47,643,861
World Bank Loan to supplement
financing of county facilities 12,607,500 - - -
Balance B/f 18,454,800 - - -
Local Revenue 182,861,337 150,861,337 202,020,000 224,242,200
Total Revenue 4,340,282,474 4,727,633,637 5,236,505,253 5,812,520,831
Lease of Medical Equipment’s
200,000,000 200,000,000 200,000,000
Total Expenditure
4,727,633,637 5,236,505,253 5,812,520,831
County Assembly
Recurrent Expenditure 388,553,640 415,284,815 418,376,215 449172055.9
Operation and Maintenance 192,496,705 290,699,371
222,581,554 231,484,816
Personnel Emoluments 196,056,935 124,585,443
195,794,653.60 203,626,439.74
Development Expenditure 157,413,932 75,000,000 78,000,000 81,120,000
23
Total revenue
CFSP 2018
FY 2017/18
Approved Budget
Estimates For FY
2018/19
Projection For
FY 2019/20
Projection For
FY 2020/21
545,967,572 490,284,815
509,896,208
530,292,056
County Executive
Recurrent Expenditure 2,377,138,444 2,854,211,950 2,529,949,246 2,631,147,216
Operation and Maintenance 953,302,524 1,873,421,687 1,873,421,687 1,873,421,687
Personnel Emoluments 1,597,033,613 1,873,421,687 1,873,421,687 1,873,421,687
Development Expenditure 1,417,176,458 1,873,421,687 1,873,421,687 1,873,421,687
Total 4,340,282,474 4,727,633,637 4,916,738,982 5,113,408,542
5.3.1 Revenue projections
The budget estimate for the financial year 2018/19 projects a total revenue target of Kshs
4,727,633,637 which is a 9 percent increase on revenue from the revenue projection from
financial year 2017/18. The revenue allocation from the national equitable share is projected
to increase from Kshs. 3,775,000,000 in the financial year 2017/18 to Kshs.3, 925,000,000 in
the financial year 2018/19 representing 11 percent increase. The local revenue target is
expected to be Ksh 150,861,337.
The inability to collect the projected local revenue targets over last three years has resulted to
shortfall of funds for financing planned projects/activities. The main cause of shortfall in
local revenue is attributed to the continued slump in the tourism sector due to insecurity
issues and revenue leakages. Table 8 below shows the targets and realized revenues trends for
the last three years that could be used as baseline ceilings for 2018/19.
Table 9: Analyis of the Local Revenue Collection from Financial Year 2013/14 to
Financial Year 2017/18 first half
Revenue
Source
Financial Year
2013/14
Financial Year
2014/15
FY 2015/16 FY 2016/17 First half of FY
2017/18
Target Actual Target Actual Target Actual Target Actual Target Actual
Local
Revenue in
( Million)
360 125
452 133 360 116 250 58.14 90 54
24
Figure 1 Bar graph showing County Local Revenue over the past three and half
financial years
The local revenue projections over the Medium Term are shown in the table 10 below.
Table 10: Local Revenue Projection
Description Targeted For First
Half Year (Ksh.)
2017/18
Actual
Revenue
Performa
nce (%)
Target For
FY 2018/19
Sand 5,450,000 3,416,740 63 10,900,000
Livestock Auction 2,404,088 1,645,140 68 4,808,175
Miraa Export 1,959,078 531,710 27 3,918,156
Produce Cess/Barter/Murram/Cheque
Clearance
1,156,269 532,830 46 2,312,537
Property Taxes - -
1.Land Rent & Rates - Current 6,598,538 554,331 8 6,197,075
2.Land Rent & Rates - Arrears 2,200,000 506,100 23 1,400,000
3.Penalties Rent & Rates 500,000 541,744 108 1,000,000
Stand Premiums 628,512 - 0 1,257,024
Plot Application/Transfer/Sub-Division 1,620,000 347,000 21 1,240,000
Clearance & Consents 139,973 60,000 43 279,946
Plot Transfer Approval 1,295,359 72,200 6 2,590,717
Lease Extension 100,000 - 0 200,000
Planning & Survey 818,000 - 0 1,636,000
Kiosks & Stalls 760,873 66,900 9 1,521,746
Miscellaneous Charges - -
Other Miscellaneous Charges ( Ground 750,000 1,615,016 215 1,500,000
0
50
100
150
200
250
300
350
400
450
500
FY2013/14 FY2014/15 FY2015/16 FY2016/17 First half of FY2017/18
Analysis of the Local Revenue Collection(millions)
Target Actual
25
Description Targeted For First
Half Year (Ksh.)
2017/18
Actual
Revenue
Performa
nce (%)
Target For
FY 2018/19
Rent)
Parking Fees / Bus Park 3,240,000 2,018,100 62 6,480,000
S.B.P Fees/Promotion 2,999,001 1,520,145 51 5,998,001
Slaughter Fees 996,677 640,780 64 1,993,353
4%Water Levies Iwasco 1,188,000 - 0 0
Public Works /Other Charges 200,000 524,000 262 400,000
Building Plan Approvals 1,854,691 17,500 1 1,709,382
Liquor License 400,000 - 0 800,000
Hospital Cost Sharing 8,024,595 1,693,925 21 16,049,190
Livestock/Veterinary 932,000 285,740 31 1,864,000
Tractor Hire 499,953 31,000 6 999,905
Agriculture Training Centre 400,000 - 0 800,000
Weights And Measures 250,000 - 0 500,000
Game - -
Game Entrance & Royalties 44,065,065 37,348,370 85
72,506,130
Grand Total 91,430,669 53,969,271 59% 150,861,337
5.3.2 Expenditure Forecasts
To fully implement the current Annual Development Plan, 2018 the expenditure forecast for
priority programmes in the financial year 2018/19 stands at Ksh. 4,427,633,637 comprising
of a recurrent expenditure forecast of Ksh 2,834,928,321 and development expenditure
forecast of Ksh 1,892,705,316. Both recurrent and development expenditure forecasts over
the medium term are presented in table 10 and 11 respectively.
The resources that the County will require to implement priority programmes in the Annual
Development Plan, 2018 will be partly met through the Medium Term Expenditure
Framework (MTEF) budget. The projected revenue target for the Financial Year 2018/19 is
Ksh. 4,727,633,637 against the total expenditure projections of Ksh 4,727,633,637 resulting
into a projected balanced budget.
Given that the County will be operating within a tight budgetary framework, full realization
of the strategic objectives as outlined in the County Annual Development Plan, 2018 will
largely depend on the goodwill of other development partners.
5.3.2.1 Recurrent Expenditure Forecasts
Table 10 below provides the recurrent expenditure forecast by sectors over the medium term
(Financial Year 2018/19 to Financial Year 2020/21)
26
Table 11: Recurrent Expenditure Forecast by sectors for Financial Year 2018/19 to
2020/21
5.3.2.2 Development Expenditure Forecast
The table below provides the development Expenditure forecast over medium term (Financial
Year 2018/19 to Financial Year 2020/21)
SECTOR/SUBSECTOR Recurrent
Ceilings For FY
2018/19
Projections for
FY 2019/20
Projections for
FY 2020/21
COUNTY ASSEMBLY 415,284,815 456,813,296.5 502,494,626
OFFICE OF GOVERNOR 271,237,492 282,086,992 293,370,471
CPSP 69,275,252 72,046,262 74,928,113
COUNTY SECRETARY 19,994,886 20,794,681 21,626,469
DELIVERY UNIT 8,024,000 8,344,960 8,678,758
DEPUTY GOVERNOR 24,000,000 24,960,000 25,958,400
PSM 35,920,000 37,356,800 38,851,072
COHESION 38,061,199 39,583,647 41,166,993
FINANCE AND
ECONOMIC PLANNING 276,428,308 287,485,440 298,984,858
SPECIAL PROGRAMME 160,057,894 166,460,210 173,118,618
LANDS 22,686,415 23,593,872 24,537,626
ROADS 9,573,318 9,956,251 10,354,501
PUBLIC WORKS& URBAN
DEVELOPMENT 18,350,000 19,084,000 19,847,360
MUNICIPAL
ADMINISTRATION 53,067,086 55,189,769 57,397,360
AGRICULTURE 49,213,608 51,182,152 53,229,438
LIVESTOCK 95,111,324 98,915,777 102,872,408
EDUCATION &
VOCATIONAL TRAINING 188,426,321 195,963,374 203,801,909
YOUTH & SPORTS 10,180,000 10,587,200 11,010,688
CULTURE AND SOCIAL
SERVICE 10,570,727 10,993,556 11,433,298
TOURISM 115,869,914 120,504,711 125,324,899
TRADE 22,402,395 23,298,491 24,230,430
WATER 56,801,481 59,073,540 61,436,482
ENVIRONMENT 36,764,815 38,235,408 39,764,824
HEALTH SERVICES 847,270,700 881,161,528 916,407,989
TOTAL 2,854,211,950 2,968,380,428 3,087,115,645
27
Table 12: Development Expenditure Forecast by departments for Financial Year
2018/19 to 2020/21
SECTOR/SUBSECTOR
Development
Ceilings For FY
2018/19
Projections For
FY 2019/20
Projections for FY
2020/21
COUNTY ASSEMBLY 75,000,000 45,000,000 25,000,000
OFFICE OF GOVERNOR 60,557,386 60,557,386 0
CPSP 0 - -
COUNTY SECRETARY 0 - -
DELIVERY UNIT 0 - -
DEPUTY GOVERNOR 0 - -
PSM 13,000,000 13,520,000 14,060,800
COHESION 0 - -
FINANCE AND
ECONOMIC PLANNING 296,539,178 308,400,745 320,736,775
SPECIAL PROGRAMME 56,950,000 59,228,000 61,597,120
LANDS 41,000,000 42,640,000 44,345,600
ROADS 168,177,193 174,904,281 181,900,452
PUBLIC WORKS& URBAN
DEVELOPMENT 0 - -
MUNICIPAL
ADMINISTRATION 257,968,100 268,286,824 289,834,297
AGRICULTURE 23,114,160 24,038,726 279,018,297
LIVESTOCK 236,885,840 246,361,274 256,215,725
EDUCATION &
VOCATIONAL TRAINING 45,000,000 46,800,000 48,672,000
YOUTH & SPORTS 188,000,000 197,600,000 205,504,000
CULTURE AND SOCIAL
SERVICE 15,000,000 15,600,000 16,224,000
TOURISM 28,000,000 31,200,000 32,448,000
TRADE 14,000,000 15,600,000 16,224,000
WATER 119,000,000 126,880,000 131,955,200
ENVIRONMENT 25,000,000 26,000,000 27,040,000
HEALTH SERVICES 210,229,830 218,639,023 227,384,584
TOTAL 1,873,421,687 1,921,256,259 2,178,160,850
5.4 Risk Management
To ensure fiscal discipline, the County government will have a balanced budget in the
Financial Year 2018/19. The County Government will ensure that the allocated resources for
spending are commensurate to the revenues expected. The budget will be financed through
transfer from the National Government and revenue collected from local sources such as fees
and charges, rates, among others as allowed by the County government Acts.
28
The risks to the budget for the Financial Year 2018/19 include challenges in local revenue
performance as the County continues to put structures in place, seal revenue leakages and
expand the revenue base. The gross County wage bill continues to be a significant concern in
the implementation of the budget and indeed in the realization of the County fiscal goals.
Delays in the release of funds from the national government have equally affected the
performance of the County Government. This has seriously disrupted the implementation of
planned activities and programmes leading to a compromised service delivery. An inherited
liability from the defunct County Council has further led to a build-up of pending bills which
continue to be a big challenge on the financial performance of the County.
29
6.0 MEDIUM TERM EXPENDITURE FRAMEWORK
6.1 Overview
In the view of limited resources, MTEF budgeting will entail adjusting non priority
expenditures to cater for the priority ones. The identified priority sectors will continue to
receive more resources. These sectors are required to utilize the allocated resources more
efficiently to generate fiscal space to accommodate other strategic interventions.
The economic sectors including livestock and roads ; will receive increasing share of
resources to boost livestock productivity and initiate value addition ventures as the
County deals with threats of food insecurity and poor market returns for livestock
products.
The County Government is also committed in improving access to clean and safe water to all
its residents. Increasing share of resources will go to Water sector so as to increase water
availability to households, livestock, and for irrigation project in the County. All other sectors
including health, education, and tourism will continue to receive adequate resources in line
with our County’s commitment to a balanced sector development so as to enhance the quality
of life for the residents of the County.
6.2 Resource Envelope
The resource envelope projections for the financial year 2018/19 and over the medium term
as shown in table 7 will largely target the transfers from the National Government as
provided for by the County Revenue Allocation of Revenue Bill 2018 and the local revenue
collection as per the County Finance Act.
All the conditional transfers from the National Government are included in the resource
envelope for financial year 2018/19. The County will also continue to benefit from grants
intended to support health sector service delivery from World Bank and the Republic of
Denmark. These funds will be allocated to County Governments on the basis of the criteria
specified in the financing agreement between the Government of Kenya and the development
partners.
30
Table 13: Resource Envelope for Financial Year 2018/19
FY 2017/18 FY 2018/19
EQUITABLE SHARE 3,775,000,000 3,925,000,000
General Provisions (Equitable Share) 3,775,000,000 3,925,000,000
CONDITIONAL ALLOCATIONS
FROM NATIONAL GOVERNMENT
280,870,017 249,049,294
Funds Received from Road Maintenance
Levy Fund
130,230,858 103,341,833
Funds Received from Health Care
Services Fund (User fee foregone)
3,472,461 3,472,461
Medical Equipment - -
Free Maternity Fund - -
Supplement for Construction of County
Headquarters
121,000,000 121,000,000
Conditional Allocation for Development
of Youth Polytechnic
26,166,698 21,235,000
CONDITIONAL ALLOCATIONS
FROM DEVELOPMENT
PARTNERS
101,551,120 402,723,006
Current Grants from Foreign
Governments Danida
13,678,677 12,656,250
Kenya Devolution Support Programme
(KDSP) World bank
36,113,321 38,668,826
World Bank Loan to Supplement
Financing of County Health Facilities
12,607,500
World Bank Loan to Supplement
Financing of County Health Facilities
B/f from 2016/17
18,454,800
World Bank Loan for Transforming
Health Systems for Universal Care
Project
20,696,822 66,229,830
Climate Smart Agricultural Project 150,000,000
Urban Support Project Development 93,968,100
Urban Support Project- Recurrent
(2017/18+2018/19)
41,200,000
Local Revenue 182,861,337 150,861,337
TOTAL REVENUE 4,340,282,474.00 4,727,633,637.00
31
6.3 Proposed Resource Allocation Prioritization Criteria
The resources available will be shared in accordance with the following prioritization criteria:
(i) Non-Discretionary Expenditure: This expenditure takes first charge and
includes payment of staff salaries and other statutory payments. Personnel
emoluments are projected to account for about 31.6 percent of the resource
envelope.
(ii) Operations and Maintenance: These are resources available to sectors for basic
operations and maintenance. This will account for about 21 percent of the non-
discretionary expenditures.
(iii) Development Expenditure: This will account for not less than 30 percent of the
projected revenue. Development expenditures will be shared based on the
programs that address the County priorities and other strategic interventions as in
the 2018, annual development plan.
The following guideline will be used on the development expenditure:
(i) Outstanding Projects: Greater emphasis will be put on the completion of on-going
projects.
(ii) Strategic Interventions: Priority will be given to policy interventions with high
impact on poverty reduction, climate change mitigation and adaptation, environmental
conservation, and value chain addition.
6.4 Overall Spending Priorities
In the Financial Year 2017/18, the County priority economic sectors are shown below.
Table 14: Development Expenditure Estimates by Sectors
Sector Supplementary Development
Estimates for first half of FY 2017/18
% of Development
Vote
County Assembly 157,413,932 10
Office of governor 270,000,000 17
County Secretary 18,000,000 1
County Public Service Board - 0
Delivery Unit - 0
Finance and economic planning 259,500,000 16
Lands and Physical Planning 12,000,000 1
Public Works, Housing Urban development 0
Roads and Infrastructure 133,230,858 8
Cohesion Intergovernmental 32,000,000 2
Agriculture 29,557,080 2
Livestock 91,000,000 6
Town Administrator 80,000,000 5
Trade Industrialization & Cooperative
Development
23,000,000 1
Medical Services 131,696,822 8
Public Health 61,000,000 4
Water 122,000,000 8
32
Sector Supplementary Development
Estimates for first half of FY 2017/18
% of Development
Vote
Environment 13,025,000 1
Public Service Management 20,000,000 1
Tourism 32,000,000 2
Education and Vocational training 65,166,698 4
Youth 24,000,000 2
Total 1,574,590,390 100
Effective use of resources will be sought across spending departments and any identified
saving will be redirected to deserving priority expenditures. In finalizing the preparation of
the budget for the financial year 2018/2019, the County Government will continue to pursue
the policy of limiting less productive expenditures and redirecting resultant savings to capital
investment.
6.5 Baseline Ceilings
The 2017/18 baseline estimates depicts the departments current spending levels. In the
recurrent expenditure category, expenditures on compensation of employee’s accounts for
about 37.05 % percent of the resource envelope and it take the first charge. Expenditure on
operations and maintenance accounts for 26.27 percent of the Total County Resource
Envelope. Overall, the recurrent expenditure on compensation to employees and operations
and maintenance account for about 63.7 percent of the projected resource envelope. The
balance of 36.3 percent from total resource envelope is the resources available to fund
planned development programmes. The table below presents the summary of baseline
ceilings.
Table 15: Baseline Ceilings
Sector Description Approved Budget
Financial year 2017/18
% of Total
Budget
County Assembly Recurrent 388,553,640 71.17
Compensation to
employees
179,298,816 46.15
Operations and
maintenance
209,254,824 53.85
Development 157,413,932 28.83
Total 545,967,572 12.58
County Executive Recurrent 402,653,442 58.30
Compensation to
employees
155,220,903 38.55
Operations and
maintenance
247,432,539 61.45
Development 288,000,000 41.70
Total 690,653,442 15.91
Finance Recurrent 318,501,160 55.10
Compensation to
employees
171,376,829 53.81
33
Sector Description Approved Budget
Financial year 2017/18
% of Total
Budget
Operations and
maintenance
147,124,331 46.19
Development 259,500,000 44.90
Total 578,001,160 13.32
Lands, Physical Planning , Roads
and public works
Sector Total 208,155,672 4.80
Lands Recurrent 33,583,414 73.67
Compensation to
employees
16,285,950 48.49
Operations and
maintenance
17,297,464 51.51
Development 12,000,000 26.33
Total 45,583,414 1.05
Roads Recurrent 29,341,400 18.05
Compensation to
employees
15,679,000 53.44
Operations and
maintenance
13,662,400 46.56
Development 133,230,858 81.95
Total 162,572,258 3.746
Agriculture, livestock and
Fishery
Sector Total 271,792,829 6.26
Agriculture Recurrent 56,699,800 65.73
Compensation to
employees
38,299,800 67.55
Operations and
maintenance
18,400,000 32.45
Development 29,557,080 34.27
Total 86,256,880 1.99
Livestock & Agriculture Recurrent 94,535,949 50.95
Compensation to
employees
73,721,228 77.98
Operations and
maintenance
20,814,721 22.02
Development 91,000,000 49.05
Total 185,535,949 4.27
Cohesion Recurrent 62,325,000 66.07
Compensation to
employees
6,620,000 10.62
Operations and
maintenance
55,705,000 89.38
Development 32,000,000 33.93
Total 94,325,000 2.17
Education, Vocational Training ,
Youth Sports and Gender
230,451,698 5.31
Education Recurrent 126,585,000 66.02
Compensation to
employees
70,592,380 55.77
Operations and
maintenance
55,992,620 44.23
Development 65,166,698 33.98
Total 191,751,698 4.42
Youth Recurrent 14,700,000 37.98
Compensation to
employees
7,432,726 50.56
Operations and 7,267,274 49.44
34
Sector Description Approved Budget
Financial year 2017/18
% of Total
Budget
maintenance
Development 24,000,000 62.02
Total 38,700,000 0.89
Tourism Recurrent 129,012,250 80.13
Compensation to
employees
102,417,560 79.39
Operations and
maintenance
26,594,690 20.61
Development 32,000,000 19.87
Total 161,012,250 3.71
Trade Recurrent 23,517,896 50.56
Compensation to
employees
11,502,632 48.91
Operations and
maintenance
12,015,264 51.09
Development 23,000,000 49.44
Total 46,517,896 1.07
PSM & ICT Recurrent 74,953,060 78.94
Compensation to
employees
18,605,560 24.82
Operations and
maintenance
56,347,500 75.18
Development 20,000,000 21.06
Total 94,953,060 2.19
Water, Sanitation, Energy ,
Environment and Natural
Resource
Sector Total 229,639,305 5.29
Water and Sanitation Recurrent 60,861,924 33.28
Compensation to
employees
36,884,689 60.60
Operations and
maintenance
23,977,235 39.40
Development 122,000,000 66.72
Total 182,861,924 4.21
Energy, Environment and
Natural Resource
Recurrent 33,752,381 72.16
Compensation to
employees
28,452,521 84.30
Operations and
maintenance
5,299,860 15.70
Development 13,025,000 27.84
Total 46,777,381 1.08
Health Services 1,097,834,464 25.29
Medical Services Recurrent 463,300,000 77.87
Compensation to
employees 370,596,600 79.99
Operations and
maintenance
92,703,400 20.01
Development 131,696,822 22.13
Total 594,996,822 13.71
Public Services Recurrent 441,837,642 87.87
Compensation to
employees
298,832,825 67.63
Operations and
maintenance 143,004,817 32.37
Development 61,000,000 12.13
Total 502,837,642 11.59
35
Sector Description Approved Budget
Financial year 2017/18
% of Total
Budget
Town Admin Recurrent 10,978,126 12.07
Compensation to
employees
6,378,918 58.11
Operations and
maintenance
4,599,208 41.89
Development 80,000,000 87.93
Total 90,978,126 2.10
Grand Total 4,340,282,474 100.00
6.6 Medium Term Expenditure Ceilings
The departmental budget ceilings for financial year 2018/19 are as provided in table 14
below. Development expenditure allocations are shared out amongst departments on the basis
of the County Integrated Development Plan (CIDP), 2018-22 and Annual Development Plan
(ADP) 2018 as well as other strategic objectives and policy goals identified in CFSP.
36
Table 16: Medium Term Expenditure Ceilings.
SECTOR/SUB
SECTOR
Recurrent
Ceilings For
FY 2018/19
Development
Ceilings For
FY 2018/19 Total
Recurrent
Projections for
FY 2019/20
Development
Projections for
FY 2019/20 Total
Recurrent
Projections for
FY 2020/21
Projections for
FY 2020/21 Total
COUNTY
ASSEMBLY 415,284,815 75,000,000 490,284,815 456813296.5 45,000,000 501,813,297 502,494,626 25,000,000 527,494,626
OFFICE OF
GOVERNOR 271,237,492 60,557,386 331,794,878 282,086,992 60,557,386 342,644,378 293,370,471 0 293,370,471
CPSP 69,275,252 0 69,275,252 72,046,262 - 72,046,262 74,928,113 - 74,928,113
COUNTY
SECRETARY 19,994,886 0 19,994,886 20,794,681 - 20,794,681 21,626,469 - 21,626,469
DELIVERY
UNIT 8,024,000 0 8,024,000 8,344,960 - 8,344,960 8,678,758 - 8,678,758
DEPUTY
GOVERNOR 24,000,000 0 24,000,000 24,960,000 - 24,960,000 25,958,400 - 25,958,400
PSM 35,920,000 13,000,000 48,920,000 37,356,800 13,520,000 50,876,800 38,851,072 14,060,800 52,911,872
COHESION 38,061,199 0 38,061,199 39,583,647 - 39,583,647 41,166,993 - 41,166,993
FINANCE
AND
ECONOMIC
PLANNING 276,428,308 296,539,178 572,967,486 287,485,440 308,400,745 595,886,185 298,984,858 320,736,775 619,721,633
SPECIAL
PROGRAMME 160,057,894 56,950,000 217,007,894 166,460,210 59,228,000 225,688,210 173,118,618 61,597,120 234,715,738
LANDS 22,686,415 41,000,000 63,686,415 23,593,872 42,640,000 66,233,872 24,537,626 44,345,600 68,883,226
ROADS 9,573,318 168,177,193 177,750,511 9,956,251 174,904,281 184,860,532 10,354,501 181,900,452 192,254,953
PUBLIC
WORKS&
URBAN
DEVELOPMEN
T 18,350,000 0 18,350,000 19,084,000 - 19,084,000 19,847,360 - 19,847,360
MUNICIPAL
ADMINISTRA
TION 53,067,086 257,968,100 311,035,186 55,189,769 268,286,824 323,476,593 57,397,360 289,834,297 347,231,657
37
SECTOR/SUB
SECTOR
Recurrent
Ceilings For
FY 2018/19
Development
Ceilings For
FY 2018/19 Total
Recurrent
Projections for
FY 2019/20
Development
Projections for
FY 2019/20 Total
Recurrent
Projections for
FY 2020/21
Projections for
FY 2020/21 Total
AGRICULTUR
E 49,213,608 23,114,160 72,327,768 51,182,152 24,038,726 75,220,878 53,229,438 279,018,297 332,247,735
LIVESTOCK 95,111,324 236,885,840 331,997,164 98,915,777 246,361,274 345,277,051 102,872,408 256,215,725 359,088,133
EDUCATION
&
VOCATIONAL
TRAINING 188,426,321 45,000,000 233,426,321 195,963,374 46,800,000 242,763,374 203,801,909 48,672,000 252,473,909
YOUTH &
SPORTS 10,180,000 188,000,000 198,180,000 10,587,200 197,600,000 208,187,200 11,010,688 205,504,000 216,514,688
CULTURE
AND SOCIAL
SERVICE 10,570,727 15,000,000 25,570,727 10,993,556 15,600,000 26,593,556 11,433,298 16,224,000 27,657,298
TOURISM 115,869,914 28,000,000 143,869,914 120,504,711 31,200,000 151,704,711 125,324,899 32,448,000 157,772,899
TRADE 22,402,395 14,000,000 36,402,395 23,298,491 15,600,000 38,898,491 24,230,430 16,224,000 40,454,430
WATER 56,801,481 119,000,000 175,801,481 59,073,540 126,880,000 185,953,540 61,436,482 131,955,200 193,391,682
ENVIRONME
NT 36,764,815 25,000,000 61,764,815 38,235,408 26,000,000 64,235,408 39,764,824 27,040,000 66,804,824
HEALTH
SERVICES 847,270,700 210,229,830 1,057,500,530 881,161,528 218,639,023 1,099,800,551 916,407,989 227,384,584 1,143,792,573
TOTAL 2,854,211,950 1,873,421,687 4,727,633,637 2,993,671,917 1,921,256,259 4,914,928,176 3,113,418,794 2,178,160,850 5,291,579,644
38
7.0 CONCLUSION
The CFSP, 2018 is prepared as a guiding tool for budget preparation of financial year
2018/19. It is meant to broadly define the expected revenues and expenditure over the
medium term as well as propose strategies of financing any anticipated deficit. Isiolo County
Government is expected to prepare a balanced budget in financial year 2018/19.
The set of policies outlined in the CFSP reflects circumstances that are in line with the fiscal
responsibilities as outlined in the PFM Act, 2012. They are also consistent with the County
Government strategic objectives pursued as a basis for allocation of public resources. These
strategic objectives are provided in the County Government priorities spelled out in the
national policies and Isiolo CIDP, 2018-2022.
The adoption of Program Based Budgeting (PBB) will ensure that all County resources are
linked to specific projects outputs and outcomes. The use of the Integrated Financial
Management Information System (IFMIS) and the introduction of e-Procurement System will
also make it possible for the County to track the resources to results achieved in a more
efficient manner.
In the budget for the financial year 2018/19, key priority areas of livestock, investment in
surface and underground water resources, road infrastructure network, Health services,
tourism promotion and Education will receive considerate allocation while maintaining
reasonable growth on other County sectors. Allocation of funds to these County key priority
areas will generally reflect the critical needs of the County residents. It is envisaged that the
enhancement of these key areas will drive the County economy up by creating greater supply
hence improving the per capita income of households.